HARRISBURG — Pennsylvania’s annual budget deadline approaches, and leading lawmakers say negotiations are ongoing.
Whether a budget for 2026-27 is adopted by the June 30 deadline remains to be seen. Each of the past four budgets has been adopted late, and a missed budget deadline is something that has occurred more often than not across the past two decades.
House Majority Appropriations Chair Rep. Jordan Harris, D-Philadelphia, and House Minority Leader Rep. Jesse Topper, R-Bedford/Fulton, each said this week that budget talks are ongoing, as are meetings between legislators involved in negotiations, as well as the governor, and among their respective staffs.
Budgets that are late by days or even weeks can have little to no publicly discernible impact. Legal precedent demands that many fiscal obligations be met regardless, including cutting paychecks to state employees.
The current year’s budget was adopted more than four months beyond the deadline, and in those instances, public institutions and their partners can be pained. Some public schools, county governments and human service providers can be forced to take out loans and furlough staff to maintain operations until state funding flows.
“It’s early. I would say we are ahead of where we were in last year’s process. You’re still dealing with a very divided government, one of the most closely divided in the nation,” Topper said, adding that budget meetings in some form or fashion occur daily.
Harris said the growing familiarity among the lawmakers involved and their staffers will be helpful in avoiding the 135-day delay Pennsylvania experienced last year.
“We are having conversations with all parties. Our staffs have been meeting and exchanging documents,” Harris said. “They’ve yet to send us (a budget proposal) but we have sent a budget over there.”
This year, similar to last year, the overall spend is a fundamental divider between legislative Republicans, Democrats and the governor.
Gov. Josh Shapiro introduced a $53.2 billion budget request in February, representing a 6.2% increase above the $50.1 billion budget that had finally been settled less than 90 days prior.
The House Democratic majority mirrored that budget and moved it over to the state Senate in mid-April with the support of a handful of Republicans.
It predictably stalled in the upper chamber, where Republicans maintain a voting majority. Also stalled are separate bills proposing to legalize and tax recreational marijuana and to tax and regulate video skill games — both of which would be key new revenue drivers in a budget proposal that, even with the initiatives included, has a $4.6 billion deficit.
Shapiro and his Democratic allies in the Legislature propose backfilling the deficit with a drawdown from Pennsylvania’s Rainy Day Fund, an account approaching $8 billion. A two-thirds majority vote in the House and Senate would be necessary, separate from the budget votes, and is complicated by restrictions on how the funds can be used.
Those favoring Shapiro’s proposal applaud further investments in public education, social service programs and workforce development — investments supporters say are necessary to attract investors and families seeking to relocate or who are considering moving away.
Opponents worry that deficit spending without new revenue exacerbates a structural deficit and will exhaust the Rainy Day Fund in three years, particularly because there’s no indication that the proposed new budget drivers, including raising the hourly minimum wage to $15, have the support necessary to clear the state Senate.
Pennsylvania’s current-year revenues were beating projections by nearly $928 million entering June.
However, Topper said the out-year deficit projections are compounding.
The Independent Fiscal Office, a non-partisan legislative agency that typically leans conservative in its fiscal approach, estimates revenues lower than the Shapiro administration does in the budget proposal. The IFO suggests that if enacted, and inclusive of new revenue drivers that are far from settled, Pennsylvania would have a structural deficit of $6 billion and growing.
To meet the proposed level of spending would require exhausting the commonwealth’s savings, Topper said. Instead, he said “adjustments” must be made to ensure Pennsylvania’s future budgets are “sustainable.”
“We still need to be cognizant of how much we’re spending, particularly when it comes to new programming and things we need to spend on into the future,” Topper said.
Harris stresses that education, plus health and human services, constitute the bulk of budgetary spending.
Pennsylvania is under court mandate to adjust its funding formula for public education after it was ruled unconstitutional.
The “adequacy gap” for hundreds of school districts with less affluent local tax bases was estimated at $4.6 billion — though the Commonwealth Court didn’t expressly rule that more money must be spent. More than $1 billion was infused in the past two budgets to make up the difference. With the additional $565 million proposed for next school year in adequacy funding, Harris notes Pennsylvania would be one-third of the way along.
“It’s not like there’s a ton of new initiatives, new this and that. There’s not a whole lot of shiny objects in this budget. It’s really us trying to maintain and pay the bills of the commonwealth,” Harris said before being asked about the structural deficit. “I hear that and I ask the question: What shouldn’t we fund? … What are you cutting? What shouldn’t be funded?”
“You can’t say we have issues without offering realistic solutions,” he said.
The state Senate acted this week to line up “housekeeping” bills for the budget, namely, those that aren’t controversial. The upper chamber hasn’t offered its own proposal for a general fund budget, maintaining an unofficial procedure where the House offers a plan from which negotiations derive.
Senate Majority Appropriations Chair Sen. Scott Martin, R-Berks/Lancaster, said this week simply that a “good faith” approach continues toward resolving a budget, one that “tackles the significant challenges our Commonwealth faces.”
Asked to respond to Harris’ questions about what spending proposals should be cut, a spokesperson for Martin replied that increasing spending amid a structural deficit won’t solve the challenges faced by Pennsylvania.
“Senator Martin has consistently spoken about the need for reforms in Medicaid and other entitlement programs to reduce the explosive growth of spending for human services. He also has raised concerns regarding the $150 million in new spending proposed for the Department of Corrections when the closure of two facilities last year should have resulted in around $100 million in savings,” spokesperson Jason Thompson said. “Rebasing spending for other line items based on historic funding lapses will also be helpful in closing the budget gap.”